A new rumor presents the possibility that discount chain Wal-Mart may carry a special run 4GB iPhone 3G as part of its agreement to begin selling the touchscreen handsets later this month.

Apple's existing iPhone 3G product line includes 8GB and 16GB models, which sell for $199 and $299, respectively, with two year contracts. A 4GB first-generation iPhone was briefly available last year for $399 but was discontinued only a couple of months later when the company restructured its offerings to focus on a reduced 8GB model in an effort to boost sales.

In a report Thursday, the BoyGeniusReport cites unfamiliar sources who say Apple may be prepared to introduce a 4GB iPhone 3G that it would allow Wal-Mart to sell for $99 alongside two-year contracts. The blog is unsure of its sources, however, and asks that readers "Just don’t hate us if this doesn’t happen, we warned you."

In total, approximately 2,500 Wal-Mart locations and 69 Sam’s Club locations that use the discount chain's ordering system are expected to carry the device. Training for Wal-Mart employees is believed to have already begun.

For their part, Wall Street analysts have recently issued reports supporting the theory of deeper-discounted iPhones in the near future.

Last month JRPG Research analyst Jamie Townsend said he expects Apple will be one of several smartphone vendors that will ramp up competition in the smartphone market by discounting their excess inventories immediately following the Christmas holiday.

Separately, Needham & Co. analyst Charles Wolf argued in an October report that Apple's strong real-world revenues and its high iPhone gross margins give the company substantial headroom to market a $99 iPhone that could lead to huge strides forward in market share.

- Apple never makes special editions of anything. The closest thing they have is a (RED) iPod they sell exclusively at Apple.
- They discontinued the original 4 GB iPhone because no one wanted it. Even then, Jobs said no one wanted a phone that small. And now, compared with the rest of the iPhone/iPod lineup, 4GB stacks up even worse.
- While I agree $99 is a great price point, I sincerely doubt Apple's going to hand special pricing to a single retailer, let alone Walmart of all people.

- Apple never makes special editions of anything. The closest thing they have is a (RED) iPod they sell exclusively at Apple.
- They discontinued the original 4 GB iPhone because no one wanted it. Even then, Jobs said no one wanted a phone that small. And now, compared with the rest of the iPhone/iPod lineup, 4GB stacks up even worse.
- While I agree $99 is a great price point, I sincerely doubt Apple's going to hand special pricing to a single retailer, let alone Walmart of all people.

The RAZR started its life as a premium product. The original packaging was a work of art and the RAZR v1.0 was very nicely put together.

As time went on, the price was cut again and again. The packaging was streamlined and several metal parts were replaced with plastic parts in the name of cost saving.

Each price cut meant that a larger demongraphic of people could afford the phone. What started life as a premium geek phone ended up being one of the biggest selling phones of all time. The change was remarkable.

Unfortunately Motorola couldn't repeat or sustain this success. Judging by the iPod, Apple will do a lot better.

The RAZR started its life as a premium product. The original packaging was a work of art and the RAZR v1.0 was very nicely put together.

As time went on, the price was cut again and again. The packaging was streamlined and several metal parts were replaced with plastic parts in the name of cost saving.

Each price cut meant that a larger demongraphic of people could afford the phone. What started life as a premium geek phone ended up being one of the biggest selling phones of all time. The change was remarkable.

Unfortunately Motorola couldn't repeat or sustain this success. Judging by the iPod, Apple will do a lot better.

Price cutting will harm it rather than help it- like the Razr. The cutting edge geeks will no longer want the gadget that the masses have. It sounds like you're contradicting yourself.

- Apple never makes special editions of anything. The closest thing they have is a (RED) iPod they sell exclusively at Apple.
- They discontinued the original 4 GB iPhone because no one wanted it. Even then, Jobs said no one wanted a phone that small. And now, compared with the rest of the iPhone/iPod lineup, 4GB stacks up even worse.
- While I agree $99 is a great price point, I sincerely doubt Apple's going to hand special pricing to a single retailer, let alone Walmart of all people.

This is never going to happen.

I agree with you on this. My reasons are similar to yours. If anything they would release a 32GB model and the 8GB would become $99 (available at all retail locations), they will never release a 4GB again. Also, walmart just doesn't seem to fit the apple style. Best Buy is at least a tech type store.

I agree with you on this. My reasons are similar to yours. If anything they would release a 32GB model and the 8GB would become $99 (available at all retail locations), they will never release a 4GB again. Also, walmart just doesn't seem to fit the apple style. Best Buy is at least a tech type store.

Agree with that. One thing though... people keep referring to the 'elitist' factor. Why is that a selling point? I don't question anybody's desire for a great phone but I have to admit I question the concept of an elitist phone. To aspire to elitism is pretty low, in my view. If you (not you, necessarily, dizzy13) are so desperate to outwardly express your own sense of bling bling and / or taste (not) supremacy over the 'common man', just get one of those diamond studded leather cases. Or better still, have one made.

Price cutting will harm it rather than help it- like the Razr. The cutting edge geeks will no longer want the gadget that the masses have. It sounds like you're contradicting yourself.

As long as you can save costs (cheaper packaging, cheaper parts, economies of scale), the mass market is where you want your product to be. Getting cutting edge geeks on board at the start of the product lifecycle is good because they'll pay a premium for the product, blog about it and generally put up with more faults. As a product matures, it makes perfect sense to move away from that demographic.

Again, look at the iPod. Remember how many accessories you used to get with it and how cool the packaging used to be? Now it's a mass market product that might not appeal to so many cutting edge geeks.

- Apple never makes special editions of anything. The closest thing they have is a (RED) iPod they sell exclusively at Apple.

U2 iPod. There were four other bands that had special editions a year or two before that. It was a little known release that was actually an official Apple product, not to be confused with other companies making their own engravings to iPods, unfortunately, those things are polluting my searches so I can't find the real Apple ones.

Quote:

- They discontinued the original 4 GB iPhone because no one wanted it. Even then, Jobs said no one wanted a phone that small. And now, compared with the rest of the iPhone/iPod lineup, 4GB stacks up even worse.

Few wanted it at $499. I imagine at $99 it would be a it. But I do agree that it's not likely.

- Apple never makes special editions of anything. The closest thing they have is a (RED) iPod they sell exclusively at Apple.
- They discontinued the original 4 GB iPhone because no one wanted it. Even then, Jobs said no one wanted a phone that small. And now, compared with the rest of the iPhone/iPod lineup, 4GB stacks up even worse.
- While I agree $99 is a great price point, I sincerely doubt Apple's going to hand special pricing to a single retailer, let alone Walmart of all people.

This is never giong to happen.

Quote:

Originally Posted by obs1970

I doubt it. The plan is the killer. They need a cheaper plan for the Wal Mart Clientele, which is pretty much dependant on AT and T. If Apple sells it, it would be regular price minus $10 (max).

I'm torn on this. You both make solid arguments as to the pros and cons. Keeping it at 4GB for Walmart does set it apart from the 8 and 16GB models, but the previous lack of sales for the 4GB model does make me question the idea, even as a rumour. However, in this economy and for the Walmart customer this may look good. I use about 6GB on my 16GB iPhone and I have videos that I have DLed from YouTube using KeepVid, so perhaps this would suffice many people new to smartphones and get them to upgrade to higher capacity iPhones in the future. Especially now that their are many new touchscreen phones competing directly now.

As for the price point, the cost of 4GB v. 8GB NAND is close enough that Apple isn't making as much per handset but volume sales can account for that. The other issue is the $70 per month (not including tax) charge that people will have to pay to use the device. Are Walmart customers really going to be okay with $99 now and then $80/month for 24 months, but weren't at $200 now and then $80/month for 24 months? Which no includes text messages.

Quote:

Originally Posted by Dave K.

Wasn't there a rumor a short time ago discussing Pay-as-you-Go pricing plans for the iPhone?? Walmart and Pay-as-you-Go phone plans go well together...

This is the only way I can see this working, but from what I've read about the sales I don't think the iPhone is ready for this type of market change.

Quote:

Originally Posted by dizzy13

I agree with you on this. My reasons are similar to yours. If anything they would release a 32GB model and the 8GB would become $99 (available at all retail locations),

From what I can see, I think the 32GB NAND is still too expensive to replace the 16GB iPhone at that price point.

Quote:

they will never release a 4GB again. Also, walmart just doesn't seem to fit the apple style. Best Buy is at least a tech type store.

I don't think so either, but perhaps this could work in the future if they release the old style body at Walmart for a lower price point. For example, when we get a new model in the summer the old one, instead of being dropped completely, could be sold as a discount device. Apple and AT&T still gets their profits from the old model now being a commodity item, while the new model still gets to live on as an elitist device. If Apple thinks it can sell more without hurting future sales by destroying the brand they will do it. They are just as greedy and for profit as the next company.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

As long as you can save costs (cheaper packaging, cheaper parts, economies of scale), the mass market is where you want your product to be. Getting cutting edge geeks on board at the start of the product lifecycle is good because they'll pay a premium for the product, blog about it and generally put up with more faults. As a product matures, it makes perfect sense to move away from that demographic.

Again, look at the iPod. Remember how many accessories you used to get with it and how cool the packaging used to be? Now it's a mass market product that might not appeal to so many cutting edge geeks.

But the iPod was never priced cheap-reduced to $99. And it really had no competion at all for years- if ever. The phone market is much more trendy and fickle- what is hot changes very fast.

Agree with that. One thing though... people keep referring to the 'elitist' factor. Why is that a selling point? I don't question anybody's desire for a great phone but I have to admit I question the concept of an elitist phone. To aspire to elitism is pretty low, in my view. If you (not you, necessarily, dizzy13) are so desperate to outwardly express your own sense of bling bling and / or taste (not) supremacy over the 'common man', just get one of those diamond studded leather cases. Or better still, have one made.

There's a lot of middle-ground between elitist and Wal-Mart. You can make your judgment about elitism and there's not much argument for that. But to deny that product tiers exist would be suicide for Apple. Why do you think Toyota has a Lexus division? Human nature is to find one's tier or aspire to a tier and buy inside it.

You might be above that - seriously. But I don't see how Apple can conduct business with the assumption that everyone is above it.

U2 iPod. There were four other bands that had special editions a year or two before that. It was a little known release that was actually an official Apple product, not to be confused with other companies making their own engravings to iPods, unfortunately, those things are polluting my searches so I can't find the real Apple ones.

Few wanted it at $499. I imagine at $99 it would be a it. But I do agree that it's not likely.

I didn't forget the U2 iPod; I see it as being similar to the (RED) iPod -- hey, they both even have Bono! There was (briefly) a Harry Potter iPod, too. Anyway, my point was that the product itself was the same. The "special edition" merely changed the case and added some included extras. They've never made a "Walmart Edition iPod" with half the memory.

And actually, I am forgetting the HP + iPod debacle. That was a complete disaster: a special edition for a retail partner. Truly one of the dumbest things Apple ever did with the iPod.

$99 is a great price, but I'd imagine if it ever happened, it would be 8GB/$99, 16GB/$199, 32GB/$299. But Apple tends to leave the price points the same and up the specs. Then again, this is a different market with different needs, so maybe they would cut the price again. It's obviously not without precedent here.

So much for the iPhone's elitist factor. Wait until the trailer park set realizes they don't get texting or MMS pics after buying the iPhone.

Y'know, I'm willing to bet real money a few people throwing around "trailer park" slurs here do in fact know where the electronics sections are at their local WM's..... ...I know I (guiltily) do.

Quote:

Originally Posted by RichL

The iPhone is quickly turning into the RAZR.

The RAZR started its life as a premium product. The original packaging was a work of art and the RAZR v1.0 was very nicely put together. As time went on, the price was cut again and again. The packaging was streamlined and several metal parts were replaced with plastic parts in the name of cost saving.

Each price cut meant that a larger demongraphic of people could afford the phone. What started life as a premium geek phone ended up being one of the biggest selling phones of all time. The change was remarkable.

Unfortunately Motorola couldn't repeat or sustain this success. Judging by the iPod, Apple will do a lot better.

Many, many brands that start off with cachet try to capitalize by attaching their name to cheaper and cheaper crap over time and eventually hurt the brand's quality image. Back when stereos were about the highest tech things you could buy, companies like Panasonic, Sony, Pioneer and others all went down this route. And once people realized, say, that most Panasonics they were seeing were garbage, Panasonic responded by bringing out Panasonic Tehnics, a higher scale sub-brand. But the damage was largely done. No one coming by your pad would say, "Oooo! Panasonic!"

Sony for one has rescued their brand image to some extent over the decades (with Trinitrons then, Vaios and PS3's now), but you can still buy cheap Sony ear buds that self-destruct in a week (as well as visit Sony Lifestyle Stores in a few upscale malls).

Apple has resolutely refused to go down this path and as we all know it's done wonders for the company despite all the carping and journalistic pressure to bring out whatever, $700 notebooks, etc. But while Apple does make a $49 iPod today, it's still in a high-quality aluminum case, oozes style, works intuitively and lasts for years.

Quote:

Originally Posted by JeffDM

U2 iPod.

Few wanted it at $499. I imagine at $99 it would be a hit. But I do agree that it's not likely.

Good point. whether likely or not. My 1 GB shuffle gets more and more varied use than my 60 GB, which is basically the jukebox for my car.

Quote:

Originally Posted by teckstud

Come on now- you know that's not a comparison. We're talking the same iPhone for $99- a $49 shuffle is not the same as a full iPod.

Which brings us to the old joke about the new iPhone Shuffle: It only has one button. Press it and it calls someone in your contact list at random.......

perhaps----walmart wants the push from the iphone they have been moving "highend" electronics lcd, plasma etc, my problem is poor product knowledge and a poor "apple" experience. have any of you tried to get a walmart rep to explain any cell phone, or plan to you when they have all those people around you?, try with a Wii game. with best buy the big problem was getting knowledgeable people. how many times did they try before you got the specialty areas and an apple guy/ gal to even understand apple. i was in a best buy and the dingdong said apple computers don't run windows, but has a good os.....how does apple and SJ , apple "value" being helped by this product "vacuum" at walmart?.....now if walmart wants to ge the "category" killer against bestbuy, maybe they will have a specialty apple place like best buy with an apple dude/ dudette. but still walmart is a volume place, kind of crazy to buy a high end, "lets -get- the- customer- to understand -the -features", i wonder if they get a cut if they push mobleme.
as far as competition, its now the ecosystem iphone-itunes-appstore-mobleme-os X that will be tough to beat, as far as symbian, good luck

There's a lot of middle-ground between elitist and Wal-Mart. You can make your judgment about elitism and there's not much argument for that. But to deny that product tiers exist would be suicide for Apple. Why do you think Toyota has a Lexus division? Human nature is to find one's tier or aspire to a tier and buy inside it.

You might be above that - seriously. But I don't see how Apple can conduct business with the assumption that everyone is above it.

Sure, if anyone picks their markets and sales channels carefully its Apple. And yes, if excluding Walmart makes you elitist, so be it. It kinda changes the meaning of the word!

I was reacting generally to postings I have seen recently from people who explicitly want their iphone to be imply their 'elite' status. One poster wanted a different design on the high end model (more memory equates to higher end in his mind) so that it was visually evident to other people that he indeed had the 'better' model. The poster himself used the term 'elite' in some form.

Sure, if anyone picks their markets and sales channels carefully its Apple. And yes, if excluding Walmart makes you elitist, so be it. It kinda changes the meaning of the word!

I was reacting generally to postings I have seen recently from people who explicitly want their iphone to be imply their 'elite' status. One poster wanted a different design on the high end model (more memory equates to higher end in his mind) so that it was visually evident to other people that he indeed had the 'better' model. The poster himself used the term 'elite' in some form.

Those people can dream on. Lots of products positioned as high-end appeal strongly to people who can't afford them. But they find a way to buy them anyway. 0% financing, etc. When the first gen iPhone came out I saw people from ALL walks of life carrying their $500+ phones. It was important to them for whatever reason - and they bought.

When someone posts that their iPhone gives them "elite" status you have to weigh that comment for what it's worth. Things like that make me feel stupid for participating in comment forums!

PS Edit - they always say women evaluate a guy's financial status by where he lives. Not his car, not his clothes, and definitely not his phone. Or maybe we've all got that wrong...

I didn't forget the U2 iPod; I see it as being similar to the (RED) iPod -- hey, they both even have Bono! There was (briefly) a Harry Potter iPod, too. Anyway, my point was that the product itself was the same. The "special edition" merely changed the case and added some included extras. They've never made a "Walmart Edition iPod" with half the memory.

And actually, I am forgetting the HP + iPod debacle. That was a complete disaster: a special edition for a retail partner. Truly one of the dumbest things Apple ever did with the iPod.

$99 is a great price, but I'd imagine if it ever happened, it would be 8GB/$99, 16GB/$199, 32GB/$299. But Apple tends to leave the price points the same and up the specs. Then again, this is a different market with different needs, so maybe they would cut the price again. It's obviously not without precedent here.

Agree with you 100%, i mean they don't even make a 4GB nano anymore and with flash memory prices declining what i can see them doing is coming up with a new 32GB iphone for $299, dropping the 16GB model to $199 and then forwarding all the 8GB stock which they have plenty to Walmart, i think it make more sense cause why are they even going to take a risk of building 4G model again if people would rather spend $100 for twice the storage

- Apple never makes special editions of anything. The closest thing they have is a (RED) iPod they sell exclusively at Apple.

Not exactly true but other commenters have already addressed this point.

Quote:

Originally Posted by aduzik

- They discontinued the original 4 GB iPhone because no one wanted it.

Wrong. When the original iPhone was released, your average consumer wasn't buying iPhones.
Geeks were and geeks wanted the biggest and the best iPhone.
Now that consumers are buying a subsidized iPhone many of them don't care how much storage capacity the iPhone has.
They never cared about capacity with any other phone they owned and they don't have reason to now.

Quote:

Originally Posted by aduzik

Even then, Jobs said no one wanted a phone that small. And now, compared with the rest of the iPhone/iPod lineup, 4GB stacks up even worse.

A friend of mine is a genius at an Apple Store and he told me that a very high percentage of customers use LESS THAN ONE GIGABYTE of storage on their iPhone.
The average consumer doesn't use the iPhone as an iPod, they use it as a Phone.
He did say that most people who don't use it for music and video do still install apps.

Quote:

Originally Posted by aduzik

- While I agree $99 is a great price point, I sincerely doubt Apple's going to hand special pricing to a single retailer, let alone Walmart of all people.

This is never giong to happen.

I highly doubt Apple will sell a special iPhone through WalMart.
I do believe there is the possibility for a 4GB iPhone to be introduced at all retailers.
The 8GB NAND Flash memory is the most expensive component in an iPhone.
So if you were looking for a way to shave costs that would be a good place to start.

The calling plans are a bigger issue as far as attracting the mass market.
In particular the $30 a month for 3G data. ($30/month * 24 month contract = $720)
Pay-as-you-go is not an option because it can't be combined with subsidized phones.
AT&T needs to drop its data plan prices.

Agree with you 100%, i mean they don't even make a 4GB nano anymore and with flash memory prices declining what i can see them doing is coming up with a new 32GB iphone for $299, dropping the 16GB model to $199 and then forwarding all the 8GB stock which they have plenty to Walmart, i think it make more sense cause why are they even going to take a risk of building 4G model again if people would rather spend $100 for twice the storage

The iPod is primarily used for storing music and videos which take up space.
An iPhone is primarily used for making phone calls which take up no space.
A large percentage of iPhone owners use less than one gigabyte on their iPhone.

Apple was going to release 4GB and 8GB iPod nanos until at the last minute they found out that the Zune was going to be available in 8GB and 16GB models.

waht's the margin of a 4gb iphone in today's memory market, if it's greater than the others maybe push the revenue, and push mobleme, to push mac sales.
this would also say that something comes big this june, like many more features then sell the feature set, then that "elitist" will have the differentiation that SJ knows sells big $$ stuff, like video conferencing maybe a larger iphone.

The RAZR started its life as a premium product. The original packaging was a work of art and the RAZR v1.0 was very nicely put together.As time went on, the price was cut again and again. The packaging was streamlined and several metal parts were replaced with plastic parts in the name of cost saving.

But it's the other part of this story that at the end of the day, the RAZR was still just a basic phone more or less that relied on styling but didn't really introduce more functionality. With the iPhone being a true platform, functionality is constantly being added (with Apple getting a portion of the App store fees, more than they make off music on a per-item basis), and the lower price point for the device lets everyone in on the game. That one fact gives it long term life vs a one-off success of a RAZR.

With the 4GB model in particular, like any small storage device, a significant percentage of people will eventually upgrade as more apps and other software fill the device. It's a hook. While iPhone is going gangbusters for a smartphone, it's still not the best selling "phone" ... and this is a significant move to mainstream it (just like the regular iPod). As an iPhone developer, I'd sure love to have Apple add millions of users who are all potential customers for my app rather than saving themselves as an "elite" phone.

- They discontinued the original 4 GB iPhone because no one wanted it. Even then, Jobs said no one wanted a phone that small. And now, compared with the rest of the iPhone/iPod lineup, 4GB stacks up even worse.

if they still had a non shuffle ipod that small I might believe it. but they have moved past 4GB.

Quote:

- While I agree $99 is a great price point, I sincerely doubt Apple's going to hand special pricing to a single retailer, let alone Walmart of all people.

I somehow doubt that they could currently create an iphone at a cost per unit that makes $99 plausible.

and not only that, but special editions are used by pretty much all companies to drive sales and why would they drive sales for an outside party they have to share the rewards with. A $99 iphone would be a tool to bring folks into apple stores as a gateway drug to the computer lineup.

at the least if they were going to go third party it would be Best Buy or CompUSA that carries the Mac computers. Not Walmart where the only additional sales are likely itunes store gift cards.

I doubt it. The plan is the killer. They need a cheaper plan for the Wal Mart Clientele, which is pretty much dependant on AT and T. If Apple sells it, it would be regular price minus $10 (max).

given that ATT dropped their special Iphone price plan with the new phone, I doubt they would bring it back just for Walmart customers getting a $99 phone. and before anyone suggests it, no I don't see Apple making a 2g phone with no GPS (ie the old phone) to sell at that price. online, at their stores or anywhere else

Apple is not having trouble selling the iPhone 3G, and it is understood their margins are healthy after subsidizing payments. Sure, the ailing economy and the desire to have even more marketshare is appealing, but selling a 4GB iPhone at Walmart is not the way Jobs will do it.

For one thing, Apple spent all this time and effort building up its image as a PREMIUM device maker. Because of their image, Apple can overprice their hardware and still sell their products. Walmart lets off a BAD image in this sense, not to mention a $99 price tag.

I'll be honest with you, just by beginning to sell the iPhone at Walmart for $99, it would put me off from it (and I already own one!). Its an image thing!

And I agree Apple doesn't usually make special versions of their products to be sold exclusively by anybody.

But hey, if anybody could demand such conditions, it would be WalMart.

perhaps----walmart wants the push from the iphone they have been moving "highend" electronics lcd, plasma etc, my problem is poor product knowledge and a poor "apple" experience. have any of you tried to get a walmart rep to explain any cell phone, or plan to you when they have all those people around you?, try with a Wii game. with best buy the big problem was getting knowledgeable people. how many times did they try before you got the specialty areas and an apple guy/ gal to even understand apple. i was in a best buy and the dingdong said apple computers don't run windows, but has a good os.....how does apple and SJ , apple "value" being helped by this product "vacuum" at walmart?.....now if walmart wants to ge the "category" killer against bestbuy, maybe they will have a specialty apple place like best buy with an apple dude/ dudette. but still walmart is a volume place, kind of crazy to buy a high end, "lets -get- the- customer- to understand -the -features", i wonder if they get a cut if they push mobleme.
as far as competition, its now the ecosystem iphone-itunes-appstore-mobleme-os X that will be tough to beat, as far as symbian, good luck

Outside of Apple stores (and maybe AT&T stores for the iphone), sales people appear to have very little understanding of the Apple products on the floor. I have no clue how much product training computer salespeople get at Best Buy, Walmart, etc. but I have not had one experience where I was given advice beyond of what I could read myself on the packaging. Best Buy may be perceived by many as a higher-end retailer than Walmart but I doubt that the product knowledge of the salespeople is much different at these retailers.